Not really an answer, but it will be less of a hassle doing this with an USB drive and UNetBootin.
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RenanMay 3 '12 at 18:25

Most likely the problem is that the CD's installer isn't able to detect the root of the original CD's disk. I don't know why you're using UNetbootin, but it's clearly not designed to install CentOS.
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jsbillingsMay 3 '12 at 19:35

@jsbillings You are most likely right. Any idea how to fix that?
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Omar AbidMay 3 '12 at 20:42

Without knowing your hardware specifics it is difficult to really say why you are getting kernel panic. If you are looking for another method in creating boot media without using a CD/DVD drive I would recommend pendrive Linux (http://www.pendrivelinux.com/) it's free software that I have had good luck with in the past. (apologies if this isn't helpful due to no USB storage, I wasn't entirely sure from the post as unetbootin is used to create USB media).

The processor is an Atom 1.6GHZ, and the laptop has 1GB RAM and enough harddrive space. Isn't that enough?
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Omar AbidMay 3 '12 at 18:32

What chipset is on the board that you are using? From what I have seen in the past kernel panic is usually the result of a driver issue. @Renan, wasn't so much of an answer, was wanting to leave a comment but didn't see the option to leave one on the post.
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RobMay 3 '12 at 19:33